A TIGHTENING GRIP

Motorola, which was relaunched in India by Flipkart in 2013, signed Amazon as its partner for 2016 Xiaomi, an exclusive partner of Flipkart, now sells its devices on Amazon too Festive sales The festive season could hold the answer to who the king of India’s e-commerce will be. With the Diwali quarter accounting for over half of all online sales, at the start of the new year, the spike in sales usually reaches the same level for all e-commerce players.

Last year, the e-commerce market grew to a new high after the Diwali sales, partly due to a smaller base and partly by marketing activities undertaken by each of the large players. Flipkart, Snapdeal and Amazon have set targets ranging between ~3,000 and ~5,000 crore in sales for the festive season this year.

However, with slowing growth, it will be interesting to see if they are able to attract new customers.

With marketplaces finding it hard to get new customers to shop online, growth over the past year has come only from grabbing market share from each other, says Anil Kumar, CEO of market analyst firm Redseer Consulting.

“The overall pie is not increasing, so Amazon can keep on ploughing money into India and corner a 60-70 per cent market share, but unless you’re able to grow the pie, what are you going to do after a year? So while Amazon wants to be the market leader in India, it doesn’t want to do it just by burning money and not having a sustainable business model,” adds Kumar.

Ultimately, in India’s e-commerce market, the player that is able to bring customers who have never shopped online onto their platforms, will emerge victorious. While Amazon is looking at services such as Prime (its offers free one to two day shipping and on-demand video) to retain existing customers, it still hasn’t cracked the art of bringing new customers online.